Coinbase’s New Perpetual Futures Could Attract Big Institutional Money to XRP – Expert

Yesterday, Coinbase announced it has received regulatory approval to launch perpetual futures trading for select cryptocurrencies, including XRP. While the exchange remained vague on which jurisdictions will have access to these derivatives, the move signals growing institutional interest in trading and speculating on XRP’s price volatility.

Despite XRP still trading below $0.50, the ability to trade futures contracts with high leverage has historically drawn hedge funds and other institutional investors. As crypto analyst Linda P. Jones noted on Twitter, these futures markets are dominated by Wall Street firms and hedge funds, not average retail traders. This implies major institutional money is poised to flow into XRP futures trading.

Jones argues this is an overwhelmingly bullish development for XRP, as the influx of leverage from institutional investors can amplify volatility and potentially catalyze a breakout from current ranges. The fact that Coinbase is being secretive about approved regions also hints these may be offshore tax havens like Bermuda and the Cayman Islands – prime jurisdictions for hedge funds looking to make large speculative bets.

Why the secrecy? As Jones speculates, the details may reveal just how focused these new futures contracts are on facilitating institutional speculation on XRP. The very fact that investors want to trade futures on XRP implies bullish expectations of price fluctuation and volatility ahead.

Of course, heavy futures volumes can also exacerbate downside volatility. But Coinbase’s move confirms professional traders see opportunity in XRP’s price action and want tools to speculate on both upside and downside. While the market impact remains to be seen, it’s a notable development for a token that has lagged the wider crypto market recovery this year. With the right momentum, new futures trading volumes could provide the catalyst to finally jolt XRP out of its long-running slump.

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Rene Peters
Rene Peters

Rene Peters is editor-in-chief of CaptainAltcoin and is responsible for editorial planning and business development. After his training as an accountant, he studied diplomacy and economics and held various positions in one of the management consultancies and in couple of digital marketing agencies. He is particularly interested in the long-term implications of blockchain technology for politics, society and the economy.